SANTEE EXPECTS SHORTFALLS TO LAST A FEW MORE YEARS

Reserves will plug holes, and eventual surplus projected

A couple of years of rocky finances eventually will give way to a return to the black in Santee.

That was City Manager Keith Till’s message June 12 at a City Council meeting at which city staff and the council discussed the city’s proposed five-year capital improvement budget for 2013-14 through 2017-18. The discussion was a part of an overview of the proposed operating budget for 2013-14 and 2014-15.

Santee’s preliminary two-year budget summary shows revenues of $33 million in 2013-14 with expenditures leaving a deficit of nearly $700,000. Revenues for 2014-15 are expected to be $34 million, with expenses leaving a deficit of just more than $500,000.

By 2017-18, the city is looking for revenues of $37 million with a surplus of $437,000, with end-of-the-year reserves at just more than $7.1 million.

“While Santee continues to project deficits and use of reserves for each of next two years, we are projecting by year three of our five-year finance plan that we reach equilibrium and an upturn and in the black in years four and five,” Till said. “The city has accumulated sufficient reserves during better times to tap into them in the first two years to the tune of $1.2 million and yet still have a reasonable reserve level over five years to get them to the target of $7 million.”

The capital improvement and operating budgets will be brought back to the City Council for adoption Wednesday. A review of other special funds is also scheduled for that meeting.

As discussed at length June 12, one of the plans to save the city some money right now — to the tune of nearly $320,000 — is to reduce Santee’s public safety staff by three in the coming year, two community service officers (from five to three) and one traffic deputy (from six to five).

The city’s biggest costs are in public safety, specifically its contract with the San Diego Sheriff’s Department, and rising pension costs in all sectors.

Sheriff’s costs are projected to increase by $2.77 million over the next five years with no contract changes. With the proposed staffing changes, the city looks to have a five-year savings of $1.73 million.

Till said an increase in building activity is on the way and he anticipates “another surge of developer fees used to kick-start” the capital improvement program, including the $26 million Prospect Avenue Corridor Enhancement Project and new additions to the San Diego River Trail system.

The city has plans for street resurfacing, new curbs and gutters as well as sidewalks in parts of the city, mostly along the western portion of Prospect Avenue.

Till said Santee plans to “realign and straighten out” some of Prospect near Gillespie Field, fix some patches of the street that are blighted, underground utility wires and removing power poles, provide water-wise landscaping, install new street lighting, upgrade storm drains over the mile-long section of Prospect Avenue between Magnolia Avenue and Cuyamaca Street.

Construction is expected to start later this year and will take about a year to complete.

The city is hoping the extensive face-lift of Prospect Avenue will attract firms seeking to relocate their corporate headquarters and foster the redevelopment of job-creating businesses and industrial parks.

“We have a couple more lean years on the operating budget side of things but we should be turning the corner in year three and upwards in terms of capital improvement projects and new development revenue coming in,” Till said. “We’re anticipating a big uptick.”